Once the hype over Second Life died out, virtual worlds kinda disappeared from the high-profile headlines. But there’s still plenty of stuff going on in the metaverse, not least its use as a test-bed for theories to apply in reality. [image by Ramona.Forcella]

Economics is a popular choice; we’ve reported before on the bank runs and currency collapses of EVE Online, and now Edward Castronova – author of Synthetic Worlds, which should be your first port of call if you’re even vaguely interested in metaverse economics – is leading a team who’re examining the economy of EverQuest II. [via SlashDot]

Researcher Edward Castronova, professor of telecommunications at Indiana University, said researchers can learn almost anything about human society in games as they really are human societies.

However unlike real society they can be observed and tweaked.

“We can do controlled experiments in virtual worlds, but we can’t do that in reality,” said Castronova.

“Controlled experimentation is the very best way to learn about cause and effect. We are on the verge of developing that capacity for human society as a whole.”

[…]

After studying 314 million transactions within the fantasy world of Norrath in “EverQuest II,” including trading in-game goods like armor, shields, leather, herbs and food, the researchers were able to calculate the GDP of one of the game servers (the back-end computer that hosts thousands of players in one world).

As more people opened accounts and flocked to Norrath, spending money on new items, researchers saw inflation spike more than 50 percent in five months.

Game economies are, much like real economies, predicated on more than just a currency. Reputation scores are a big part of game economies (and many social networks, too), but the problem with “karma” systems is that they’re usually implemented in a way that renders them pointless, and which leads to the formation of in-game “mafias” [via BoingBoing]:

There can be no negative public karma-at least for establishing the trustworthiness of active users. A bad enough public score will simply lead to that user’s abandoning the account and starting a new one, a process we call karma bankruptcy. This setup defeats the primary goal of karma-to publicly identify bad actors. Assuming that a karma starts at zero for a brand-new user that an application has no information about, it can never go below zero, since karma bankruptcy resets it. Just look at the record of eBay sellers with more than three red stars-you’ll see that most haven’t sold anything in months or years, either because the sellers quit or they’re now doing business under different account names.

A different (though related) kind of reputation will be bothering the business crowd, however, and the Gartner firm of analysts is convinced that in less than five years, 70% of businesses will have issued avatar dress-codes to their employees [via SlashDot]:

“As the use of virtual environments for business purposes grows, enterprises need to understand how employees are using avatars in ways that might affect the enterprise or the enterprise’s reputation,” said James Lundy, managing vice president at Gartner, in a statement.

“We advise establishing codes of behavior that apply in any circumstance when an employee is acting as a company representative, whether in a real or virtual environment.”

This puts me in mind of a recurring motif in William Gibson’s novels, where he repeatedly makes the point that the most powerful and resource-rich virtual environments will be the ones that look subtle and understated, while the low-budget hucksters will dress to impress with excessive bling and extravagant eye-candy. The subtle grunge and mundane decay of reality is harder to simulate than grandiose overstatement; as in real life, it’ll be wise to tread lightly around the ostentatious.

Not interested in playing games or doing business in the metaverse? Well, you could always go learn to speak a dying language.